Carroll Quigley - Tragedy and Hope - A History of the World in Our Time

On October 23, 1923, the Conservatives overthrew Lloyd George and set up their own government under Bonar Law. In the following General Election they obtained 344 of 615 seats, and were able to continue in office. This Conservative government lasted only fifteen months under Bonar Law and Stanley Baldwin. In domestic affairs its chief activities were piecemeal action on unemployment and talk about a protective tariff. On this last issue Baldwin called a General Election in December 1923 and lost his majority, although continuing to have the largest block in Commons, 258 seats to Labour’s 191 and the Liberals’ 159. Asquith, who held the balance of power, could have thrown his support either way, and decided to throw it to Labour, hoping to give Labour a “fair chance.” Thus the first Labour government in history came to office, if not to power.

With an unfriendly House of Lords, an almost completely inexperienced Cabinet, a minority government, a large majority of its members in Commons trade unionists with no parliamentary experience, and a Liberal veto over any effort to carry out a Socialist or even a Labourite program, little could be expected from MacDonald’s first government. Little was accomplished, nothing of permanent importance at least, and within three months the prime minister was looking about for an excuse to resign. His government continued the practice of piecemeal solutions for unemployment, began public subsidies for housing, lowered the taxes on necessities (sugar, tea, coffee, cocoa), abolished the corporation tax and the wartime duties of 33 1/3 percent on motorcars, watches, clocks, musical instruments, hats, and plate glass, as well as the 1921 duties on “key industries” (optical glass, chemicals, electrical apparatus).

The chief political issue of the day, however, was Communism. This rose to a fever heat when MacDonald recognized Soviet Russia and tried to make a commercial treaty with the same country. MacDonald cooperated with the Liberals with ill-grace and resigned when Parliament decided to investigate the quashing of the prosecution, under the Incitement to Mutiny Act, of the editor of a Communist weekly paper. In the resulting general election the Conservatives played the “red scare” for all it was worth. They were aided greatly when the permanent officials of the Foreign Office issued, four days before the election, the so-called “Zinoviev Letter.” This forged document called upon British subjects to support a violent revolution in behalf of the Third International. It undoubtedly played some role in gaining the Conservatives their largest majority in many years, 412 out of 615 seats.

Thus began a Conservative government which was in office under Baldwin for five years. Winston Churchill as chancellor of the Exchequer carried out the stabilization policy which put England on the gold standard with the pound sterling at the prewar rate of parity. As we have indicated in Chapter 7, this policy of deflation drove Britain into an economic depression and a period of labor conflict, and the policy was so bungled in its execution that Britain was doomed to semi-depression for almost a decade, was in financial subjection to France until September 1931, and was driven closer to domestic rebellion than she had been at any time since the Chartist movement of 1848. The recognition of Russia and the trade agreement with Russia were abrogated; the import duties were restored; and the income tax was lowered (although the inheritance tax was raised). As deficits grew, they were made up by a series of raids on available special funds. The chief domestic event of the period was the General Strike of May 3-12, 1926.

The General Strike developed from a strike in the coal mines and from the determination of both sides to bring the class struggle to a showdown. The British mines were in bad condition because of the nature of the coal deposits and because of mismanagement which left them with inadequate and obsolete technological equipment. Most of them were high-cost producers compared to the mines of northern France and western Germany. The deflation resulting from the effort to stabilize the pound hit the mines with special impact, since prices could be cut only if costs were cut first, an action which meant, for the mines above all, cutting of wages. The loss of the export trade, resulting from Germany’s efforts to pay reparations in coal, and especially the return of the Ruhr mines to full production after the French evacuation of that area in 1924 made the mines the natural focal point for labor troubles in England.

The mines had been under government control during the war. After that conflict ended, many Liberals, Labourites, and the miners themselves wanted nationalization. This attitude was reflected in the report of a royal commission under Lord Sankey which recommended nationalization and higher wages. The government gave the latter but refused the former (1919). In 1921, when government control ended, the owners demanded longer hours and reduced wages. The miners refused, went out on strike for three months (March-June 1921), and won a promise of a government subsidy to raise wages in the worse-paid districts. In 1925, as a result of stabilization, the owners announced new wage cuts. Because the miners objected, the government appointed a new royal commission under Sir Herbert Samuel. This group condemned the subsidy and recommended closing down high-cost mines, selling output collectively, and cutting wages while leaving hours of work the same. Since owners, government, and labor were all willing to force a showdown, the affair drifted into a crisis when the government invoked the Emergency Powers Act of 1920 and the Trades Union Congress answered with an order for a General Strike.

In the General Strike all union labor went out. Upper- and middle-class volunteers sought to keep utilities and other essential economic activities functioning. The government issued its own news bulletin (The British Gazette under Churchill), used the British Broadcasting Corporation to attack the unions, and had their side supported by the only available newspaper, the antiunion Daily Mail, which was printed in Paris and flown over.

The Trades Union Congress had no real heart in the strike, and soon ended it, leaving the striking miners to shift for themselves. The miners stayed out for six months, and then began to drift back to work to escape starvation. They were thoroughly beaten, with the result that many left England. The population of the worst-hit area, South Wales, fell by 250,000 in three years.

Among the results of the failure of the General Strike, two events must be mentioned. The Trades Dispute Act of 1927 forbade sympathy strikes, restricted picketing, prohibited state employees from affiliating with other workers, restored the Taff Vale decision, and changed the basis for collection of labor-union political funds from those who did not refuse to contribute to those who specifically agreed to contribute. The Trades Union Congress, disillusioned with economic weapons of class conflict, discarded the strike from its arsenal, and concentrated its attention on political weapons. In the economic field it became increasingly conservative and began to negotiate with the leaders of industry, like Lord Melchett of Imperial Chemical Industries, on methods by which capital and labor might cooperate to mulct consumers. A National Industrial Council, consisting of the Trades Union Congress, the Federation of British Industries, and the National Conference of Employers, was set up as the instrument of this cooperation.

The last three years of the Conservative government were marked by the creation of a national system of electric-power distribution and of a government-owned monopoly over radio (1926), the extension of the electoral franchise to women between twenty-one and thirty years of age (1928), the Road Transport Act, and the Local Government Act (1929). In these later years the government became increasingly unpopular because of a number of arbitrary acts by the police. As a result, the general election of 1929 was almost a repetition of that of 1923: the Conservatives fell to 260 seats; Labour, with 288 seats, was the largest party but lacked a majority; and the Liberals, with 59 seats, held the balance of power. As in 1923, the Liberals threw their support to Labour, bringing to office the second MacDonald government.